They have been created with a read to serve primarily the agricultural areas of India with basic banking and monetary services

850 Source: Primary data The above table shows that 41.4 per cent of the farmers agree that the Positive attitude is important factor of Customer Loyalty whereas 24.6 per cent of the farmers strongly agree with the above factor.
To study the relationship between the type of organization and the significance factor of “Positive attitude” on customers. And the chi-square analysis is done. Hypothesis The significance attached by the customers to the factor of Positive attitude and the relationship is independent of the type of the organization. It is found that the chi-square test value 73.514 is greater than the table value of 9.488 for four degrees of freedom at 0.05 level of significance (P = .000 is less than 0.05).
Hence, it is inferred that the significance attached by the customers to the factor, “Positive attitude” while strong relationships, and is dependent on the type of the organization. 6.15. Association between the type of organization and Banks Brand Image To study the association between the type of organization and significance attached to above mentioned banks brand image, by the respondents and chi-square analysis is carried out, and it is presented as follows.
The following statements are related to experience of banks brand image about the particular bank. The extent to which believes by the respondent, the feature described in the statement. This reflects to respondent perceptions about the bank service. 6.15.1. Consistent The respondents are asked to express their opinion about the Consistent. The details are furnished in the following table. Table: 6.15.1.
Consistent Type of Organization Strongly Disagree (1) Disagree (2) Neutral (3) Agree (4) Strongly Agree (5) Total Count % Count % Count % Count % Count % Telangana Grameena Bank 25 2.9 154 18.1 49 5.8 372 43.8 250 29.4 850 Total 25 2.9 154 18.1 49 5.8 372 43.8 250 29.4 850 Source: Primary data The above table shows that 43.8 per cent of the farmers agree that the Consistent is important factor of banks brand image whereas 29.4 per cent of the farmers strongly agree with the above factor.
To study the relationship between the type of organization and the significance factor of “Consistent” on customers. And the chi-square analysis is done. Hypothesis The significance attached by the customers to the factor of Consistent and the relationship is independent of the type of the organization. It is found that the chi-square test value 25.838 is greater than the table value of 9.488 for four degrees of freedom at 0.05 level of significance (P = .000 is less than 0.05).
Hence, it is inferred that the significance attached by the customers to the factor, “Consistent” while strong relationships, and is dependent on the type of the organization. 6.15.2. Explicit quality The respondents are asked to express their opinion about the Explicit quality. The details are furnished in the following table. Table6.15.2.
Explicit quality Type of Organization Strongly Disagree (1) Disagree (2) Neutral (3) Agree (4) Strongly Agree (5) Total Count % Count % Count % Count % Count % Telangana Grameena Bank 24 2.8 138 16.2 47 5.5 395 46.5 246 28.9 850 Total 24 2.8 138 16.2 47 5.5 395 46.5 246 28.9 850 Source: Primary data The above table shows that 46.5 per cent of the farmers agree that the explicit quality is important factor of banks brand image whereas 16.2 per cent of the farmers disagree with the above factor.
To study the relationship between the type of organization and the significance factor of “Explicit quality” on customers. And the chi-square analysis is done. Hypothesis The significance attached by the customers to the factor of explicit quality and the relationship is independent of the type of the organization. It is found that the chi-square test value 29.986 is greater than the table value of 9.488 for four degrees of freedom at 0.05 level of significance (P = .000 is less than 0.05).
Hence, it is inferred that the significance attached by the customers to the factor, “Explicit quality” while strong relationships, and is dependent on the type of the organization. 6.16. Features of the Borrowers Table: 6.16.1 Asset Value of the Farmers Value of Assets Number of borrowers percentage Rs. 1,000 to 10,000 154 18.1 10001 to 20000 240 28.2 20001 to 50000 289 34 50001 to 100000 108 12.7 above 100000 59 6.9 Total 850 100.0
Source: Primary data The above table clarifies that the majority of the respondents own the assets valued between Rs. 20000 - 50000(34%), while those owning the assets valued between Rs. 10,001 to 20,000 are behind (28.2%). A sizable percentage (18.1%) of the borrowers owns the assets valued between Rs. 1,000 to 10,000. There are 108 borrowers (12.7%) who owned the assets valued between Rs. 50,000/- and 1.0
lakh and 59 borrower possessed assets worth over Rs. 1.0 Lakh. It shows that from the Bank's viewpoint a substantial number of the borrowers have good economic positions. Conversely, it also indicates that there is a wide scope for the Telangana Grameena Bank to cover the very poor (marginal) farmers and artisans in the villages. The Telangana Grameena Bank should take positive steps towards convincing these potential beneficiaries to avail of the loan facilities being offered by the bank.
6.16.2. Income Generation of Farmers Table: 6.16.2. Crop Loan borrower (Rupees in Lakhs) 2010 2015 Number of borrowers Average Sales per Borrowers Average purchase Borrower Net income borrower Average sales per borrower Average purchase per borrower Net income borrower Net income impact borrower 100 6877 6764 223 18291 4433 9857 10744 Source: Primary data The information about the Farmers who have availed the crop loan for the agricultural activities gives the information about the year 2010 gives an idea of the net impact of the Telangana Grameena Bank financial assistance in terms of the borrower's income generation efforts.
The overall picture emerging from the tabulated information clearly brings out the fact that if the farmers avail the crop loan in time and utilize it judiciously, the returns are substantial, as is evidenced by the quantum jump in the net income per borrower from Rs. 6877 (in 2010) to Rs. 10,744 (in 2015). Simultaneously, the average sales of agricultural produce per borrower have also gone up, contributing to the overall trading and commercial activities of the region.
Table: 6.16.3. Income generations of the Telangana Grameena Bank Agricultural Loan borrowers (Rupees in Lakhs) 2010 2015 Number of borrowers Average Sales per Borrowers Average purchase Borrower Net income borrower Average sales per borrower Average purchase per borrower Net income borrower Net income impact borrower 347 8395 9125 835 14365 3800 11525 13230 Source: Primary data The above table shows a negative impact in the year 2010, because the investment took place only after that.
Columns 5 to 7 shows the positive impact in the year 2015 as the agriculture started to yield the income only after the initial investment. the net impact on the borrowers. It shows that there is a challenging scope to increase the Telangana Grameena Bank business in this field. Table: 6.16.4. Income generations of the Allied Loan borrowers (Rupees in Lakhs) 2010 2015 Number of borrowers Average Sales per Borrowers Average purchase Borrower Net income borrower Average sales per borrower Average purchase per borrower Net income borrower Net income impact borrower 285 31332 20910 2421 42952 14614 20483 18962 Source: Primary data As with previous Tables, the columns give the picture in the years 2010 and 2015 Thus, it is seen that the borrowers of the allied loans of the Telangana Grameena bank have registered good impact. Any expansion of this field would help region to solve the burning problem of unemployment in the region.
Most of the people are engaged in agriculture, and allied work in the region. 6.17 Opinion of the Borrowers and the Staff about the Operational Performance of the Bank Attempt is made to evaluate the working performance of the bank by collecting the opinions of the borrowers and the staff of the bank in the selected area during the period of study.
The Evaluation of the performance of the bank on the basis of the bank records alone is not sufficient and correct approach. Therefore, it is very essential to analyze the opinions of the borrowers and staff regarding the functioning of the bank the views of borrowers and staff respectively on the working of the bank in terms of services rendered to its customers and treatment of employees of the bank The borrowers of the bank are asked on credit services provided to the borrowers of the bank.
Further, with respect to their impression about bank credit more particularly in terms of factors, such as procedures involved, adequacy of loan, rate of interest charges, follow-up visits, etc; are considered to elicit their opinions to assess the working performance of the selected bank during the period of study in the selected area under review.. 6.17.1
Procedures to Obtain Loan: Since a good number of borrowers in the villages are comparatively less educated, they would aspire for simple and easily understandable procedures for obtaining loan from the bank. If the procedures are cumbersome, which some of the borrowers would keep away from approaching the bank for credit. The borrowers are asked to express their opinions by way of schedule and the same are presented in table Table: 6.17 . 1.
Opinions of the Borrowers of the Bank Credit on the Procedure of Getting Loan Opinions on the procedure for obtain loan Number of Borrowers Percentage of Borrowers Easy to follow 450 53 Difficult to follow 245 28.8 No opinion 155 18.2 Total 850 100 Source: Primary data The data on the classification of reasons for approaching the bank loan in table identified that about 53 per cent of the borrowers were of the opinion that the procedure for getting loan from the bank was simple and easy to follow. 28.8
per cent of them remarked that it was difficult to follow and the rest of 18.2 per cent of the borrowers had no opinion on this item in the selected area of study. The borrowers who faced problems in the procedure for getting loan opined that obtaining no dues certificate and the production of security as specified by the bank officials concerned were the major problems.
However, these problems can be easily overcome by the borrowers if the bank staff can extend co-operation by explaining the procedure in more user friendly approach. 6.17.2. Rate of Interest Charged by Bank Loans: The bank charges a rate of interest on advances of the bank from its credit users. When enquired about the rate of interest charged by Telangana Grameena Bank, the sample borrowers expressed the following opinions are furnished Table: 6.17.2.
Rate of Interest Charged Opinion on the interest rate Number of farmers Percentage Reasonable 510 60 Unreasonable 115 13.5 No opinion 225 26.5 Total 850 100 Source: Primary data The above Table shows that 63 per cent of the respondents expressed that the rate of interest charged by the bank was reasonable. While 13.5 per cent of the respondents felt that the rate of interest was unreasonable and 26.5 per cent had no opinion on this issue.
Since, it is a rural bank for rural development; it can reduce interest rate by one per cent with the special assistance from the Asian Development Bank (ADB) and the National Bank for Agriculture and Rural Development (NABARD) in this regard. 6.17.3. Attitude of the Bank Staff The attitude of the bank staff towards the bank borrowers would explain on the user-friendliness of the bank.
The borrowers of the rural banks are not an exception to it. The customers always expect a cordial and co-operative attitude from the bank employees. The data with respect to the impression created by the bank employees in the minds of the farmers Table: 6.17.3. Attitude of the Bank Staff towards the Bank Loan Opinion on the interest rate Number of farmers Percentage Cordial and co-operative 565 66 Indifferent and Unhelpful 85 10 Humiliating and Arrogant 85 10 Could not say any opinion 115 14 Total 850 100 Source: Primary data From the above Table it is observed that 66 per cent of the farmers found that the bank employees are cordial and cooperative.
10 per cent of the borrowers criticized the bank staff for their humiliating and arrogant attitude towards borrowers and 14 per cent of the respondents refrained from giving any opinion about the attitude of the bank employees. Thus, it is evident from the opinions elicited on the attitude of the bank employees towards its customers that the Telangana Grameena Bank has the local feel, which is very important for the successful functioning of a bank institution in rural area. 6.17.4.
Role of Local Money Lenders in Providing Loan to the Rural People In the early 1950's and prior to that, local money lenders were the major sources of finance to the village people. To protect the farmers and other weaker sections from the clutches of money lenders, the Government of India decided to start a number of rural banks to cater to the needs of the rural mass for their development through various schemes.
Accordingly the Grameena Banks came into existence to finance the various purposes of people, especially in the rural areas of the country. In this context, it is worth understanding the present role of money lenders from the view point of borrowers. Naturally, such a question may be asked to understand whether the money lenders have lost their grip over the rural folks since the advent of this bank.
The data on the role of private indigenous money lenders in providing credit to the rural people is shown in the following table Table: 6.17.4. Role of Local Money Lenders in Providing Loan to the Rural People Opinion about the role of indigenous money lenders Number of farmers Percentage weakened 530 62 Remains as before 85 10 No Idea 145 17 Strengthened 90 11 Total 850 100 Source: Primary data The table reveals it can be seen that 62 per cent of the farmers opined that the power of local money lenders had been considerably reduced over the period of time.
Further, about 10 per cent of the borrowers are of the opinion that the grip of money lenders remains as before and 17 per cent of the farmers remarked that they had no idea about local money lenders. On the other hand 11 per cent of the farmers are of the opinion that the position of local money lenders has been strengthened. Most of the borrowers observed that private money lenders business was badly hit in the villages, since the setting up of the Grameena Banks.
Thus, it can be concluded that one of the main objectives of setting up of Rural Regional Banks was viz., to save the poor people from the clutches of the local money lenders through the expansion of more branches of rural banks to the rural areas. 6.17.5. Adequacy of Financial Assistance Adequacy of the amount of loan advanced is one of the major determinants of efficient utilization of any loan.
To take-up and complete any production program, a certain amount of credit is necessary. During the study period the borrowers are asked about the adequacy of loan (Scheme wise) such as Agricultural Crop Loan (ACL), Agricultural Gold Loan (AGL), Agricultural Dairy Loan (ADL), Small-Scale Industrial Loan (SSIL), Retail Trade Loan (RTL), Self-employment Loan (SEL) and the same is furnished. Table: 6.17.5.
Adequacy of Financial Assistance Type of Scheme Adequate Inadequate Number of farmers Percentage Number of farmers Percentage Agricultural Crop Loan 117 35.5 175 34 Agricultural Gold Loan 121 36.7 145 28 Agricultural Dairy Loan 28 8.5 79 15 Small-Scale Industrial Loan 32 9.7 45 9 Retail Trade Loan 21 6.4 38 7 Self-employment Loan 11 3.3 38 7 Total 320 100 520 100 Source: Primary data The above Table depicts that majority of the borrowers (61.2
per cent) express that the amount of loan provided by the bank is inadequate. The data on scheme-wise shows that in case of retail trade agricultural loan and self-employment, most of the borrowers remark the quantum of loan is inadequate. Bank authorities should take a measure to overcome this problem by personal inspection. 6.17.6.
Repayment Schedule A scientific and logical consideration is needed for fixing the repayment schedule of loans. Sufficient time period should be given to the borrowers for repayment. Table 8.6 presents the opinion of the respondents about the repayment schedule of the bank loan during the period of study. Table: 7.1.6.
Repayment Schedule Type of Scheme Convenient Inconvenient Number of farmers Percentage Number of farmers Percentage Agricultural Crop Loan 218 34 175 27.6 Agricultural Gold Loan 206 32 145 25.7 Agricultural Dairy Loan 48 8 79 21.0 Small-Scale Industrial Loan 68 11 45 14.8 Retail Trade Loan 56 9 38 5.7 Self-employment Loan 44 7 38 5.2 Total 640 100 210 100.0
Source: Primary data From the above data in table it can be observed that majority of the bank borrowers in all the loan schemes expect crop loan repayment period is convenient to them. On the whole, there are 75.4 per cent of the borrowers expressed that the repayment is convenient and the remaining 24.6 per cent opined the period is inconvenient. In the case of agriculture crop loan majority of the borrowers (27.6
per cent) pointed out the repayment period is inconvenient to them. They further expressed that since the bank insist on repayment soon after harvesting; the farmers could not wait for an adequate, remunerative price for their products. 16.17.7. Delay in Sanction of Loan It is often said that credit delayed is credit denied.
Timely sanction of credit is an important factor for determining the utilization and repayment of the loan. In fact, one of the major complaints about obtaining loans from the co-operative credit society was the delay in sanctioning credit. The Reserve Bank of India issued instructions to all the banks to ensure that the applications for loan up to Rs.10, 000 are to be disposed of within three to four weeks1.
When the borrowers were enquired about the time taken for disbursement of loan by Telangana Grameena Bank, they expressed the opinions as given Table: 6.17.7. Delay in Sanction of Loan Period in Weeks ACL AGL ADL SSIL RTL SEL Total 0 to 1 84 67 61 48 36 29 325 1 to 2 78 61 54 39 29 24 285 2 to 4 58 40 34 19 9 5 165 more than 4 19 16 13 10 9 8 75 Total 239 184 162 116 83 66 850 Source: Primary data It can be seen from the data in that 35.1
per cent of the respondents were able to get the loan within one week; about 28.3 per cent of the respondents received the loan between 1to 2weeks, and 17.4 per cent of the respondents received within 2 to 4 weeks after their application for loan. Only 9.2 per cent had to wait for more than four weeks. It can be concluded from this, that the bank followed the instructions of Reserve Bank of India, with regard to the sanction and disbursement of loans. Table: 6.17.8.
Opinions of the Loaners on the Causes for Delay in Getting Bank Loans Reasons for delay in sanction of Bank Loan Number of respondents Percentage Delay caused by bank official 326 38.4 Delay in submitting records 165 19.4 Delay in documenting 148 17.4 Delay in getting suitable Collateral security survey 138 16.2 Delay caused by government officials 43 5.1 Unknown reasons 30 3.5 Total 850 100.0 Source: Primary data From the data in Table 7.1.8
it is observed that the organizational structure of the bank has a significant bearing in the delay in sanction and disbursement of bank loan. The branch managers have reported that as they do not have any discretionary powers to sanction higher amounts and have to forward such applications to the head office for approval and await sanction, as the procedure followed by the co-operative societies.
Because of this, some borrowers in fact have reported that they had to make one or two trips to the head office for pursuing their loan applications and for sanction. It can be viewed from the data in the table that about 19.4 per cent admitted that the delay was caused by their own fault and about 17.4 per cent of the respondents expressed that the delay was caused due to the submission of incomplete applications.
Delay in getting suitable collateral security or surety was the reason expressed by 16.2 per cent of the respondents. The other difficulty that had been brought to the notice was the delay caused by the Government officials in the Integrated Rural Development Programmes (IRDP). It is further noticed from the data that around 3.5
per cent of the respondents did not know the causes of delay or not able to express anything on this issue in the selected area during the period of study. 6.17.9. Average Time and Money spent for Getting the Bank Loan The cost factor in rural credit cannot be viewed as the simple interest cost quoted by the banks. it has to be evaluated in phrases of the interest fees in addition to different incidentals a borrower incurs within the course of securing the loan amount. the incidentals right here in contain of the monetary expenses a borrower is obliged to pay and the time loss because of the visits to be made to the top quarters of the financial institution.The experiences of the interviewed borrowers on this issue in the selected area of study is provided in Table Table: 7.1.9. Average Time and Money spent for Getting the Bank Loan S.No.
Details ACL AGL ADL SSIL RTL SEL Total 1 Average number if days spent for getting the loan 2to 4 1 to 3 2 to 9 2 to 8 2to 6 2to 4 2to 4 2 Average expenditure for travel and food (Rs.) 21 11 23 23 20 23 20 3 Fee for documents (Rs.) 5 2 6 9 4 3 5.5 4 Average expenses for getting loan (Rs.) 26 13 29 32 24 26 25 5 Average Loan amount 3750 1480 3196 7650 5968 4147 43.7 6 Cost of borrowing (%) 0.7 0.9 0.9 0.4 0.8 0.6 0.72 Source: Primary data The above table reveal that the sample borrowers on the whole spent on an average 2-4 days for getting the loan.
The data on scheme-wise shows that the highest of 2-9 days for dairy-loan borrowers and the lowest 1-3 days for agricultural gold-loan borrowers. The loss of working days owing to undue delay in granting credit is a vexing problem experienced by the majority of borrowers. They were compelled to follow up the loan application because of the uncertainty of the outcome and in so doing; the borrowers are met with two kinds of losses, viz., the loss of wages when they are away from work and the additional expenses for travel, food, etc.
All these expenses increase the cost of obtaining the loan, which in turn reduces the actual amount of money available for the productive work, particularly in case of agricultural labourers and marginal farmers who have no other sources of income to meet the extra expenditure. In this context the average expenditure for food and travel is estimated to be Rs.20 and fee for documents is Rs.5.50. 6.17.10 Dependency of Borrowers prior to the formation of Rural Regional Banks Information regarding the source from which the sample borrowers used to borrow before shifting over to the Grameena Bank is presented in the following table Table: 7.1.10 Dependency of Borrowers prior to the formation of Rural Regional Banks Agency for obtaining loan Number of borrowers Percentage Commercial Banks 314 37 Co-operative Banks 145 17 Government 65 8 Money Lenders 68 8 No Banking Habit 258 30 Total 850 100 Source: Primary data The data in Table 7.1.10 shows that 37.0
per cent of the sample borrowers had banking business with commercial banks. About 17.0 per cent reported that they depended on co-operative banks for credit while only 8.0 per cent depended on Government. On the other hand, 8.0 per cent of the borrowers had depended on moneylenders, where as nearly 30.0
per cent of the sample borrowers had no banking habit before the existence of Grameena Banks. Thus, the opening of more and more regional rural bank branches helped the rural people to come closer to the banking habit and in a way; these banks inculcated banking habits among the rural people. 6.17.11 End Utilization Visit by Bank Officials Pre-sanction visit and post-sanction visits by bank officials have a great bearing on the utilization of the loan amount.